NASD Notice to Members 05-10 - January 2005

NASD Amends Rule Governing Time Limits for Submission of Arbitration Claims; Effective Date: May 1, 2005

Executive Summary

The Securities and Exchange Commission (SEC) has approved amendments to Rule 10304 of the NASD Code of Arbitration Procedure (Code) relating to time limits on the submission of claims in arbitration.1 The amendments clarify that arbitrators, and not courts, will determine whether a claim is ineligible for arbitration under the rule; make clear that dismissal of a claim on eligibility grounds in arbitration does not preclude a claimant from pursuing the claim in court; provide that, by requesting dismissal of a claim under the rule, the requesting party is agreeing that the claimant may withdraw all related claims without prejudice and may pursue all of the claims in court; and state that the six-year time limit on the submission of claims does not apply to any claim that is directed to arbitration by a court of competent jurisdiction upon request of a member or associated person. Rule 10304, as amended, is included in this Notice as Attachment A.

 

The effective date of this rule change is May 1, 2005, for all claims filed with NASD on or after that date.

 

Questions regarding this Notice can be directed to Jean I. Feeney, Vice President and Chief Counsel, Dispute Resolution, at (202) 728-6959; or Laura Gansler, Assistant General Counsel, Regulatory Policy and Oversight, at (202) 728-8275.